Tax implication of house gifted to me

My parents, who have a house in Sri Lanka and spend 10 months of the year in the UK, but have no assets in the UK, would like to gift that house to me. What would be my tax implication given I don't wish to sell it, and will simply rent it ? I believe this simply a matter of declaring tax on foreign income in my Self Assessment, but I'm not sure - is that correct? Will inheritance tax rules apply at all ?

Hi Dusty,

There won't be any tax implications until you sell it.

You are correct in stating that you need to declare the rental income.

Your parents however, need to report it as a sale of the property and may need to pay Capital Gains Tax. 

Although they are gifting this to you, for tax purposes this is classed as a sale.

Thank you,